Tuesday, 4 October 2011

Maybe Not So Ho Hum at the Supreme Court: FLSA and Wal-Mart v. Dukes

In addition to denying cert on the USERRA hostile environment case (see yesterday's post), the Supreme Court yesterday also reversed an FLSA case from the 9th Circuit:

10-1202 CHINESE DAILY NEWS, INC. V. WANG, LYNN, ET AL. The petition for a writ of certiorari is granted. The judgment is vacated, and the case is remanded to the United States Court of Appeals for the Ninth Circuit for further consideration in light of Wal-Mart Stores, Inc. v. Dukes, 564 U.S. ___ (2011). Justice Breyer took no part in the consideration or decision of this petition.

The use of Wal-Mart Stores, Inc. v. Dukes in an FLSA case is a key link for those who are advocating for greater control by the courts of FLSA collective actions. Unfortunately, as the 9th Circuit opinion shows, while the case is an FLSA case it is also a Rule 23 case on the state law claims. So, the linkage is not as definitive as one would like.

In its petition, the Chinese Daily News leaned heavily on the decision, in which the Supreme Court unanimously ruled that claims for injunctions or declaratory rulings in class actions typically don’t allow for monetary payments.

For a more aggressive attempt to use the Dukes decision in a pure FLSA context check out the mandamus action recently filed in the 6th Circuit, In Re HCR ManorCare($). The employer which had been ordered to send notice under the two-step Lusardi standard had challenged the court's continued use of such standard in light of Dukes. Unfortunately, last week, the Court denied the petition.

However, if (like me) you are looking for glimmers of hope, the Court did note "Moreover, “because mandamus is a discretionary remedy, a Court may decline to issue the writ if it finds that it would not be ‘appropriate under the circumstances’ even if the petitioner has shown he is ‘clear[ly ] and indisputabl[y]’ entitled to it.”

To be fair, the Court did not find that the employer was entitled to the writ. However, with these cases and others, it does appear that small chinks in what heretofore has been a fairly impermeable wall protecting easy passage to conditional certification for FLSA collective actions are beginning to occur.

Although it would be disruptive to the financial income of lawyers who practice on both sides of the FLSA docket, I can't think of a single trend in employment law that could be more important.